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Spring has always been a lively season for Australian skies. This year, it turned into a full-blown traffic jam at 35,000 feet.

New figures from the Australian Competition and Consumer Commission reveal that a surge in domestic travel through September and October 2025 pushed airfares to their highest levels in almost three years, as airlines struggled to seat a nation determined to get moving.

In October alone, more than 5.5 million passengers flew domestically, up 3.8 per cent on the same month last year and the second-busiest month on record since January 2019, the first month the ACCC began tracking the industry in detail.

It was not just the usual spring surge driving the queues. With interstate teams contesting both the AFL and NRL finals, Melbourne and Sydney became twin magnets for sporting pilgrims.

“While September and October are typically very busy months for domestic air travel, both the AFL and NRL featured interstate teams in their finals this year which led to additional demand for travel to Melbourne and Sydney,” ACCC Commissioner Anna Brakey said.

Airlines moved quickly to respond. Qantas and Virgin Australia together added more than 45 extra flights in late September and early October. Even so, the additional lift only nudged total seating capacity up 4.5 per cent in October last year, not enough to relieve the pressure.

By October, flights were running noticeably fuller than usual. More than 84 per cent of all seats were occupied, well above the broader 12-month average of 81.6 per cent. Unsurprisingly, prices followed demand.

Average domestic airfares in October were higher than at any time since December 2022, rising 3.2 per cent in October 2024.

“Airfares are typically elevated during peak demand periods, but the higher passenger levels in October 2025 placed additional pressure on seat capacity which pushed up airfares for consumers,” Ms Brakey said.

For travellers already wrestling with rising household costs, it was another reminder that cheap seats remain elusive when planes fill quickly, and competition remains thin.

Rex Lifeline Brings Relief to the Regions

Away from the metropolitan rush, the sector delivered one rare note of calm. The proposed acquisition of Regional Express (Rex) by US-based Air T has eased fears across regional Australia that vital air links might wither.

“Rex provides important connectivity and competition across many regional communities, and Air T’s purchase of Rex is an important milestone in preserving this,” Ms Brakey said.

Rex entered voluntary administration in July 2024, sending a ripple of anxiety through towns already accustomed to fragile transport options. Air T has now committed to keeping existing regional services flying and to rebuilding the full pre-pandemic network over time.

“This will not only offer consumers continuity for the routes where Rex is the sole operator, but it will preserve competitive tension on routes where Rex competes with other airlines, leading to better outcomes for consumers,” Ms Brakey said.

For communities where the airport is more of a lifeline than a luxury, that continuity matters.

Weather Clips Airline Reliability

If passenger numbers soared in October, punctuality did not. On-time performance slipped to 74.1 per cent, well below the long-term industry average of 80.6 per cent, hampered by adverse weather, including persistent crosswinds in Sydney.

The cancellation rate, at 2.1 per cent, remained broadly in line with the historical average.

“We expect the airlines to improve their service reliability across all routes to give consumers a better experience when they travel,” Ms Brakey said.

For passengers marooned in terminals as storms rolled through Sydney, the expectation felt more like a plea.

Substantial Profits, Thin Competition

The ACCC report also dissected the latest financial results of Qantas Group and Virgin Australia, both of which have now delivered three straight years in profit, a striking turnaround from the dark days of the pandemic.

At Qantas, growth has been underwritten by the Loyalty business and the Jetstar arm, with Jetstar Domestic recording a 55 per cent jump in earnings since 2023–24. The low-cost carrier continues to ride a wave of leisure demand as Australia’s only true budget airline.

Virgin Australia has also cashed in on renewed appetite for travel, supported by the steady expansion of its Velocity Frequent Flyer program.

Yet behind the glossy balance sheets sits a stubborn structural reality.

“The high barriers to entry into the domestic aviation sector have helped to stave off competition from new entrants, particularly since Rex withdrew from routes between major cities,” Ms Brakey said.

Today, Qantas Group and Virgin Australia control about 98 per cent of the domestic market. It is not a duopoly born of collusion, but one shaped by capital intensity, scale and the sheer difficulty of launching a new airline in Australia.

Virgin repositioned itself in 2020 as a mid-market carrier, chasing stability over outright dominance. Qantas sharpened its two-brand strategy, splitting premium travellers into Qantas and bargain hunters into Jetstar a move that has quietly delivered it around two-thirds of the total market.

“More competition in the domestic airline industry is essential to ensure consumers can enjoy lower airfares and more choice,” Ms Brakey said.

It is an observation few frequent flyers would contest.

A Market Flying High – and Tight

From a commercial standpoint, the sector is in enviable health. Planes are full. Loyalty programs are booming. Profits are robust.

From the passenger’s seat, the picture is less flattering. Prices are rising, flights are crowded, and punctuality is fragile when weather intervenes.

The spring of 2025 has shown just how finely balanced Australia’s domestic aviation market has become. Demand can surge overnight. Capacity moves slowly. Competition remains narrow.

And when those forces converge, it is travellers who feel the squeeze first, often at the booking screen.